Will the Current Global Stock Markets Retrace in the Next Two Months?
Global stock indices have recently caught a very unstable financial environment with the spotlight being directed more towards the currency trade fight between the United States and China in late 2021. Many international investors are watching this closely as a means of gaining profit from fluctuating stock indexes around the world. The volatility has been felt by international money managers who see potential gains not only from currency trading but also from other markets like the oil and gold. If you want to gain from this instability, you must be aware that it is an unpredictable time for global stock and Forex exchanges. To be able to reap the rewards of the volatility, you must become an expert at foreign stock and Forex trading.
Experts have noticed a possible move of the global stock indexes during the second half of the decade, which they labelled as the “2021 Bear Market“. In this decade, experts believe that there will be no growth experienced by major global economy economies. This could lead to replacement effects on investors that see the market in a bearish direction. If you are an investor that does not want to wait for the market to retrace it’s broken trends, you must be ready to catch the next move in this global economy.
Experts have noted that the second half of the decade will see a global stock index that has a record high in stocks, bonds and commodities. The prediction is that by the end of the decade, there will be a massive shift in capital investments and bond yields. The yield to premium will become extremely high in coming years, especially in the U.S. where the average interest rate is close to historical lows. If the bond yields do not follow the trend, then investors will be on the hunt for a safe haven.
Bond yields have recently shown a sign of strength that can be attributed to the first half of the year. However, a possible global financial bear market that follows after the end of the year could result in sharp price changes. Some analysts predict that the emerging global economic slowdown will lead to volatility in global stock indexes. If this happens, the market may fall by over thirty percent.
The correlation between stock markets and the real estate sector has been falling since the first half of the year. However, the prediction does not show that the correlation will decrease in the next two years. Experts believe that investors are expecting the first few months of this decade to be the worst for global stock markets. This is due to the fact that there are some concerns that the slowdown in China will slow down global economic growth. According to analysts, the lack of stimulus measures and decline in the credit quality in China may result in more financial turbulence.
A possible signal that the market may turn in a bearish direction in the next two months is the release of the March index for global stock indexes. Many traders have attributed the low point of the March chart resistance as the start of a major retracement upwards. When the index started to make a replacement, many traders bought shares and shorted them. Once the market started to reverse, many short sellers were left out in the cold as they were left without their money. As the market started to reverse, most of the short sellers were forced out of business due to heavy loss of capital.
There was another report that came out with another interesting point regarding the possible start of a global recession. The United States government released an economic report stating that there will probably be a recession starting in the next two months. However, many analysts believe that the slowdown will only last until the end of the next fiscal year. In the United States, it appears that investors are pulling out of the stock market in response to the low outlook of the economy. It is said that bond yields will start to increase and global stock indexes will start to fall once bond yields start to increase.
What do these predictions mean for traders? Any of these trends could signal a large move in any direction or a reversal of any current trend in either direction. If a global recession begins in the next two months, the index prices will likely decrease. Bond yields will increase and stock indexes will start to retrace. If bond yields start to increase then U.S. Treasury Bonds will be more expensive and global stock markets will react accordingly. This article only discusses predictions from experts and not from personal experience.